Artificial intelligence driving stock market rally in China

Last year, investors in Chinese stocks lurched between euphoria and disappointment as the market swerved in response to the government’s attempts to kick-start growth in China’s sluggish economy.

- Meaghan Tobin

Alibaba's headquarters in Hangzhou, China. Surging interest in artificial intelligence is generating huge gains for Chinese tech stocks like Alibaba, which has more than doubled this year. — QILAI SHEN/THE NEW YORK TIMES

(QILAI SHEN/THE NEW YORK TIMES)

Now, China’s stock markets are in the midst of another bullish run. Analysts and investors say that this time, rather than being driven mainly by policy changes, the moves are linked to a trend that is also pushing up stocks in the United States and elsewhere: artificial intelligence.

“There has been a resetting of expectations around what the government will and won't do to stimulate the economy,” said Eric Wong, the founder of Stillpoint Investments, a hedge fund. “That has enabled people to be more comfortable to put money into parts of the economy where they think there is outsized growth.”

The share prices of companies that play a major role in China’s Al industry have grown by triple digits this year. Alibaba, which makes widely used open-source AI systems, has gained more than 120 per cent this year. Semiconductor Manufacturing International Corp., China’s most advanced chipmaker, is up even more, around 180 per cent. Other Chinese tech stocks, including Baidu, Tencent and Xiaomi, are up around 60 per cent this year.